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EXHIBIT 10.3.4
AMENDED AND RESTATED LOAN AGREEMENT
THIS Amended and Restated Loan Agreement (this "Agreement") is made
and entered into as of the 26th day of September, 1996, between and among: (i)
FELCOR SUITE HOTELS, INC. ("FLCO"), a Maryland corporation (successor-by-merger
to FelCor Suite Hotels, Inc., a Delaware corporation); (ii) FELCOR SUITES
LIMITED PARTNERSHIP (the "Partnership"), a Delaware limited partnership (FLCO
and Partnership being referred herein collectively as the "Borrowers"); and
(iii) BOATMEN'S NATIONAL BANK OF OKLAHOMA (the "Agent"), a national banking
association (formerly known as Bank IV Oklahoma, National Association); (iv)
FIRST TENNESSEE BANK NATIONAL ASSOCIATION ("First Tennessee"), a national
banking association; (v) LIBERTY BANK AND TRUST COMPANY OF TULSA, NATIONAL
ASSOCIATION ("Liberty"), a national banking association; (vi) BANK ONE, TEXAS,
N.A. ("Bank One"), a national banking association; (vii) FIRST NATIONAL BANK OF
COMMERCE ("Bank of Commerce"), a national banking association (the Agent, First
Tennessee, Liberty, Bank One and Bank of Commerce being referred to herein
collectively as the "Banks"); and (viii) AMSOUTH BANK OF ALABAMA, an Alabama
state banking corporation ("AmSouth").
WITNESSETH:
WHEREAS, the Agent, The Boatmen's National Bank of St. Louis
("Boatmen's"), First Tennessee and the Borrowers entered into a Loan Agreement
(the "Original Loan Agreement") dated as of September 28, 1994, whereby the
Agent, Boatmen's and First Tennessee agreed to establish a credit (the
"Credit") to provide general working capital funds and to provide funds for the
acquisition by the Borrowers of additional hotels (in addition to the 6 Embassy
Suites(R) Hotels then owned and to be subject to among other things a mortgage
lien in favor of the Agent, for itself and as the Agent for the ratable benefit
of Boatmen's and First Tennessee, securing payment of the loans made pursuant
to the Credit) in the amount of the Maximum Bank Commitment (as defined in the
Original Loan Agreement) with each Bank to be responsible for its separate and
proportionate share of all Loan Advances made pursuant to the Credit, all as
provided in the Original Loan Agreement; and
WHEREAS, in connection with the Original Loan Agreement, the Borrowers
executed and delivered to the Agent, as agent for itself, Boatmen's and First
Tennessee, that certain promissory note dated as of September 28, 1994 (the
"Prior Note"), in the maximum principal amount of $50,000,000; and
WHEREAS, to provide collateral and security for the payment of all of
the indebtedness, obligations and liabilities of the Borrowers incurred or
arising under the Original Loan Agreement, as amended, the Partnership
executed, acknowledged and delivered to the Agent for itself and as the Agent
for the ratable benefit of the Banks (as that term has been amended from time
to time): (A) one or more Mortgage, Deed of Trust, Assignment of Rents,
Security Agreement and Financing Statement (collectively the "Indenture")
encumbering certain real property located in Arizona, Florida, Georgia,
Louisiana, Massachusetts, Oklahoma, Tennessee and Texas together with all of
the hereditaments, appurtenances, tenements and easements appurtenant thereto,
all hotels and all other buildings and improvements located upon said real
property described in the Indenture along
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with all of the fixtures, equipment, rents, rentals and the inventories,
accounts and general intangibles relating thereto; (B) one or more Assignment
of Rents and Leases relating to the properties covered by the Indenture
(collectively the "Rent Assignment"); and (C) the Borrowers executed and
delivered to the Agent separate financing statements (the "Financing
Statements") relating to the collateral afforded by the Indenture. Attached
hereto as Exhibit B is a complete listing of the Indenture, Rent Assignment and
Financing Statements and the recordation/filing information for the same.
WHEREAS, on April 26, 1995, the Agent, Boatmen's, First Tennessee,
Bank One and the Borrowers entered into that certain First Amendment to Loan
Agreement wherein Bank One purchased an interest in the Credit, the Credit was
extended and increased to the maximum principal amount of $80,000,000 and other
terms of the Original Loan Agreement were amended;
WHEREAS, on November 10, 1995, the Agent, Boatmen's, First Tennessee,
Bank One, Liberty and the Borrowers entered into that certain Second Amendment
to Loan Agreement (the "Second Amendment") wherein Liberty purchased an
interest in the Credit, the Credit was extended and increased to the maximum
principal amount of $100,000,000, the maturity of the Credit was extended and
other terms of the Original Loan Agreement were amended;
WHEREAS, on August 26, 1996, the Agent, Boatmen's, First Tennessee,
Bank One, Liberty, AmSouth and the Borrowers entered into that certain Third
Amendment to Loan Agreement (the "Third Amendment") wherein AmSouth purchased
the interest of Boatmen's in the Credit and other terms of the Original Loan
Agreement were amended; and
WHEREAS, the parties hereto wish to amend and restate the Original
Loan Agreement to provide for a term loan, to reduce the maximum principal
amount of the Credit to $85,000,000, to add and substitute Banks, and to issue
restated Notes in renewal and modification of existing notes, on terms and
conditions acceptable to the parties, as more fully set forth herein.
NOW, THEREFORE, in consideration of the premises, mutual covenants,
representations and agreements made herein and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
A. DEFINITION OF CERTAIN TERMS
As used in this Agreement the following words shall have the following
meanings:
(1) Accepted Appraised Value. The value assigned by the
Banks to each Hotel mortgaged and encumbered in favor of the Banks by
the Indenture. Attached hereto as Exhibit C is a listing of the
Accepted Appraised Values for the Hotels which are currently mortgaged
by the Indenture.
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(2) Account. As to any Person the right of such Person
to receive payment for goods sold or leased or service performed by
such Person.
(3) Affiliate. With respect to any Person (1) any other
Person which, directly or indirectly, is in control of, is controlled
by or is under common control with such Person. For purposes of this
Agreement, control of a Person by another Person shall be deemed to
exist if such other Person has the power, directly or indirectly,
either to (i) vote twenty percent (20%) or more of the securities
having the power to vote in an election of directors of such Person,
or (ii) direct the management of such Person, whether by contract or
otherwise and whether alone or in combination with others.
Notwithstanding the foregoing, the Lessee shall be an Affiliate of
Borrowers for purposes of this Agreement.
(4) Amendment Fee. The fee denominated as such in
Section 4.18 of this Agreement to be paid by the Borrowers to the
Banks.
(5) Bankruptcy Code. The United States Bankruptcy Code,
as the same may be amended.
(6) Business Day. A day other than a Saturday or Sunday
or any other day on which commercial banks located in Dallas, Texas;
Memphis, Tennessee; New Orleans, Louisiana and Tulsa, Oklahoma, are
authorized or required to close for business generally under the laws
of any of the above states or the United States of America.
(7) Capital Lease. Any lease obligation that has been or
is required by GAAP to be capitalized.
(8) Charter Documents. The articles or certificate of
incorporation and bylaws of a corporation; the articles of association
and bylaws of an unincorporated association; the certificate of
limited partnership and partnership agreement of a limited
partnership; the partnership agreement of a general partnership; the
operating agreement of a limited liability company; or the indenture
of a trust.
(9) Code. The Internal Revenue Code of 1986, as amended
from time to time, and all regulations of the Internal Revenue Service
("IRS") thereunder.
(10) Collateral shall mean all of the land, buildings and
other improvements presently located and which may be hereinafter
located upon the Lands described in the Indenture and shall include
all Hotels covered by the Indenture and each supplement thereto and
shall include all of the fixtures thereto appertaining (as such term
may be defined by the laws of the state in which the applicable Hotel
is located) and all of the present and future interests of the
Partnership in and to all Equipment located upon the Lands on which
any Hotel is located, all present and future interests of the
Partnership (if any) in respect of any Inventory used or to be used in
connection with the operation or maintenance of any Hotel, as well as
all rents, issues, profits, avails, room rents, receivables, accounts,
accounts receivable, profits, royalties, and income derived from the
Leases and any other leases
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covering a Hotel subject to the Indenture or any supplements thereto,
and any and all present and future interests of the Partnership in all
General Intangibles relating to any and all of the Hotels subject to
the Indenture or any supplements thereto, and all proceeds and
substitutions of the foregoing property; provided, however, that the
receivables of Lessee shall not constitute a part of the Collateral.
Equipment, General Intangibles and Inventory shall have the meanings
assigned to such terms by the Uniform Commercial Code.
(11) Contract. Any contract, note, deed or other
agreement or undertaking of any Person.
(12) Credit. Shall have the meaning specified in the
first introductory paragraph of this Agreement and shall include all
previous extensions and modifications thereto.
(13) Effective Date. Shall have the meaning specified in
Article III of this Agreement.
(14) Employment Law. The Employee Retirement Income
Security Act ("ERISA"), the Occupational Safety and Health Act, the
Fair Labor Standards Act or any other law pertaining to the terms or
conditions or employment, labor or safety in the work place.
(15) Encumbrance. As to any item of real or personal
property (including without limitation all intangible personal
property), any easement, right of way, license, condition, restrictive
covenant, reservation, encroachment or other adverse possession or
other zoning or similar restriction, that is not a Lien but is
enforceable by any Person other than the record owner of such property
or Lessee.
(16) Environmental Law. The Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation
and Liability Act, the Toxic Substances Control Act, the Clean Water
Act, the Clean Air Act, or any other Law pertaining to environmental
quality or remediation of releases of Hazardous Waste, or that imposes
liability or establishes standards of conduct with respect to
Hazardous Waste.
(17) Environmental Property Transfer Act. Any Law that
conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer,
sale or lease of any property or deed or title for any property for
environmental reasons including, but not limited to, any so-called
"Environmental Cleanup Responsibility Acts" or "Responsible Property
Transfer Acts".
(18) EPA. The United States Environmental Protection
Agency.
(19) Existing Indebtedness. Shall have the meaning
specified paragraph (c) of Article III of this Agreement.
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(20) Financing Statements. Shall have the meaning
specified in the third introductory paragraph of this Agreement.
(21) Fiscal Year. The fiscal year of each Borrower for
financial accounting and reporting purposes and for each Borrower its
fiscal year is a year of twelve calendar months ending on the 31st of
December of each year.
(22) GAAP. Those generally accepted accounting principals
from time to time announced in Statements of the Financial Accounting
Standards Board and in Opinions of the American Institute of Certified
Public Accountants or which have other substantial substantive support
in the United States of America and are applicable in the particular
circumstances to which GAAP relates, as applied on a consistent basis.
(23) Governmental Authority. The federal government or
the United States of America; any state of the United States; any
local government or municipality within the territory or under the
jurisdiction of any of the foregoing; any department, agency,
division, or instrumentality of any of the foregoing; and any court
whose orders or judgments are enforceable by or within the territory
of any of the foregoing.
(24) Hazardous Waste. Any hazardous, explosive,
corrosive, reactive, radioactive, or toxic material or substance, or
any other substance, whether in solid, liquid or gaseous form, whose
manufacture, storage, transportation, release or disposal is subject
to regulation or control under an Environmental Law, or which is
defined or treated as being hazardous, explosive, corrosive, reactive,
radioactive, or toxic in any Law.
(25) Hotel(s). Those buildings and all related
facilities, which provide temporary or extended housing to patrons or
guests, located on the Lands covered by the Indenture.
(26) Indebtedness. As to any Person at any particular
date, any obligation enforceable against such Person (a) to repay
borrowed money; (b) to pay the deferred purchase price of property or
services; (c) to make payments or reimbursements with respect to bank
acceptances or to a factor; (d) to make payments or reimbursements
with respect to letters of credit or drawings thereunder; (e) that is
secured by any Lien on any property of such Person; (f) to make any
payment or contribution to a Multi-Employer Plan; (g) that is
evidenced by a note, bond, debenture or similar instrument; (h) under
any conditional sale agreement or title retention agreement; or (i) to
pay interest or fees with respect to any of the foregoing.
(27) Indenture. Shall have the meaning specified in the
third introductory paragraph of this Agreement.
(28) Indirect Obligation. As to any Person, (a) any
guaranty by such Person of any Obligation of another person; (b) any
Lien on any property of such Person that secures any Obligation of
another Person, (c) any enforceable contractual obligation that such
Person (i) purchase an Obligation of another Person or any property
that is security for such
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Obligation, (ii) advance or contribute funds to another Person for the
payment of an Obligation of such other Person or to maintain the
working capital, net worth or solvency of such other Person as
required in any documents evidencing an Obligation of such other
Person, (iii) purchase property, securities or services from another
Person for the purpose of assuring the beneficiary of any Obligation
of such other Person that such other Person has the ability to timely
pay or discharge such Obligation, (iv) ▇▇▇▇▇ ▇ ▇▇▇▇ on any property of
such Person to secure any Obligation of another Person, or (v)
otherwise assure or hold harmless the beneficiary of any Obligation of
another Person against loss in respect thereof; and (d) any other
contractual requirement enforceable against such Person that has the
same substantive effect as any of the foregoing. The term "Indirect
Obligation" does not, however, include the indorsement by a Person of
instruments for deposit or collection in the ordinary course of
business or the liability of a general partner of a partnership for
Obligations of such partnership. The amount of any Indirect
Obligation of a Person shall be deemed to be the stated or
determinable amount of the Obligation in respect of which such
Indirect Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith.
(29) Insurance/Condemnation Proceeds. Insurance proceeds
payable as a consequence of damage or destruction occurring to or in
respect of any Collateral and proceeds payable as a consequence of any
condemnation or sale or transfer in lieu of condemnation of any
Collateral.
(30) Interest Period. Shall mean each period commencing
on the date a Loan Advance is made (or if no Loan Advance is made, the
date the prior Interest Period ended) and ending on the last day of
the period selected by the Borrowers pursuant to the provisions below.
The duration of each such Interest Period shall be one, two, three or
six months, in each case as the Borrowers may designate, upon notice
received by Agent not later than 11:00 a.m. (Tulsa, Oklahoma time) on
the third Business Day prior to the first day of such Interest Period.
Whenever any Interest Period commences on the last London Business Day
of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) that
Interest Period shall end on the last London Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing,
any Interest Period that would otherwise end on a day which is not a
London Business Day shall end on the next succeeding London Business
Day (or, if such next succeeding London Business Day falls in the next
succeeding calendar month, on the next preceding London Business Day).
(31) Journal. Shall mean The Wall Street Journal.
(32) Lands. Shall refer to those real properties on which
Hotels are located and covered by the Indenture. A complete listing
of all the real properties constituting the Lands is attached hereto
as Exhibit A.
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(33) Law. Any statute, ordinance, code, rule, regulation,
order, judgment, award or decree of any Governmental Authority which
is applicable to or governs, directly or indirectly, the situation,
conduct or Person in question.
(34) Leases. All those Leases presently in effect between
the Partnership and the Lessee as described or referred to in the Rent
Assignment and which may at any time hereafter be in effect covering
or applying to any Hotel covered by the Indenture or any amendment,
supplement or restatement thereof, as amended, modified, restated or
replaced from time to time with approval of the Banks.
(35) Lessee. DJONT Operations, L.L.C., the limited
liability company organized under the laws of the State of Delaware
which is presently the Lessee under a separate Lease of each Hotel
covered by the Indenture executed by the Partnership as the Lessor.
(36) Libor-Rate. For any day, as used herein, shall
mean the rate of interest quoted for the "London Interbank Offered
Rates (LIBOR)" category of the "Money Rates" column in the Journal on
the date of the commencement of a new Interest Period (or, if no
Journal is published on such day, the next previous publication date
thereof) as the average of quotations at major money center banks for
the Interest Period, two London Business Days prior to the first day
of such Interest Period. The Agent shall give prompt notice to the
Borrowers of the Libor-Rate so determined or adjusted, which
determination or adjustment shall be conclusive if made in good faith.
If the Journal shall cease to publish such Libor-Rate quotations, the
Agent shall determine such rates as the average of such Libor-Rate
quotations of three major New York money center banks of whom the
Agent shall inquire.
(37) License. Each agreement between Promus Hotels, Inc.,
or any successor as the licensor, and either the Partnership or the
Lessee as the licensee permitting the use of the Embassy Suites(R),
Inc. trademarks, trade names and any related rights in connection
with the ownership or operation of any Hotel at any time covered by
the Indenture.
(38) Lien. As to any item of real or personal property,
any interest therein that secures payment or performance of an
Obligation or Indirect Obligation of any Person, whether created by
statute (such as but not limited to a statutory lien for work or
materials) or under a mortgage, deed of trust, security agreement,
financing statement, pledge, hypothecation agreement, assignment, or
other document, or which arises under any form of preferential or
title retention agreement or arrangement (including but not limited to
a conditional sale agreement or a lease) that has substantially the
same economic effect as any of the foregoing.
(39) Loan. The loan to be made by the Banks to the
Borrowers pursuant to the provisions of this Agreement and each
amendment and supplement hereto and shall refer to all advances of
funds made by the Banks to or for the account of the Borrowers.
(40) Loan Account. Shall have the meaning specified in
Section 4.13 of this Agreement.
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(41) Loan Advance. All funds advanced and to be advanced
by the Banks to the Borrowers under the provisions of this Agreement
and each amendment and supplement hereto.
(42) Loan Documents. Shall refer to the Restated Notes,
Indenture, Rent Assignment, Financing Statements, Supplemental
Security Documents, this Agreement and each writing at any time
executed by the Borrowers, or either of them, to further evidence any
Indebtedness or Obligation of the Borrowers, or either of them, to the
Agent or to the Banks or purporting to provide any collateral or
surety for the payment of such Indebtedness or Obligations.
(43) Loan Facility Fee. The fee denominated as such in
Section 4.17 of this Agreement to be paid by the Borrowers to the
Banks.
(44) Loan Proceeds. All funds advanced by the Banks to
the Borrowers upon the Loan pursuant to the provisions of this
Agreement.
(45) London Business Day. Shall mean a day for dealing in
deposits in Dollars by and among banks in the London interbank market
which is also a Business Day.
(46) Manager. Shall have the meaning specified in Section
1.21 of this Agreement.
(47) Management Agreements. All existing Management
Agreements between the Lessee and Manager as applicable to each of the
Hotels covered by the Indenture and any like or similar agreements at
any time in effect providing for management services to be provided by
Manager or any other management organization approved by the Banks in
respect of any Hotel presently or hereafter covered by the Indenture.
(48) Material Agreement. Any Contract whose violation by
a Person could have a Material Adverse Effect with respect to such
Person.
(49) Material Adverse Effect. As to any Person and with
respect to any event or occurrence of whatever nature (including any
adverse determination in any litigation, arbitration, investigation or
proceeding), a material adverse effect on the business, operations,
revenues, financial condition, property, or business prospects of such
Person or the ability of such Person to timely pay or perform such
Person's Obligations generally, or in the case of Borrower,
specifically the ability of such Borrower to pay or perform any of
such Borrower's Obligations to the Banks.
(50) Material Law. Any Law whose violation by a Person
reasonably could have a Material Adverse Effect with respect to such
Person.
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(51) Material License. (a) As to any Person, any license,
permit or consent from a Governmental Authority or other Person and
any registration, filing with a Governmental Authority or other Person
which if not obtained, held or made by such Person reasonably could
have a Material Adverse Effect with respect to such Person or any
other Person including, without limitation, any occupancy permits and
liquor licenses, and (b) as to any Person who is a party to this
Agreement or any of the other Loan Documents, any license, permit or
consent from a Governmental Authority or other Person and any
registration or filing with a Governmental Authority or other Person
that is necessary for the execution or performance by such party, or
the validity or enforceability against such party, of this Agreement
or such other Loan Document.
(52) Material Obligation. As to any Person, an Obligation
which if not fully and timely paid or performed reasonably could have
a Material Adverse Effect on such Person.
(53) Material Proceeding. Any litigation, investigation
or other proceeding by or before any Governmental Authority (a) which
includes any of the Loan Documents or any of the transactions
contemplated thereby or involves a Borrower as a party or any property
of a Borrower, and reasonably could have a Material Adverse Effect
with respect to such Borrower if adversely determined; (b) in which
there has been issued any injunction, writ, temporary restraining
order or any other order of any nature which purports to restrain or
enjoin the making of any Loan Advance, the consummation of any other
transaction contemplated by the Loan Documents or the enforceability
of any of the Loan Documents, (c) which involves the actual or alleged
breach or violation by Borrower of, or default by a Borrower under,
any Material Agreement; or (d) which involves the alleged or actual
violation by any Borrower of any Material Law.
(54) Maximum Bank Commitment. Shall have the meaning
specified in Section 2.1 of this Agreement.
(55) Multi-Employer Plan. A Pension Benefit plan which is
a multi-employer plan as defined in Section 4001(a)(3) of ERISA.
(56) Note(s). The term "Note" or "Notes" shall refer to
the Prior Note, the Replacement Notes and any substitutions,
modifications and amendments thereof, including the Restated Notes to
be executed herewith.
(57) Obligation. As to any Person, any Indebtedness of
such Person and any other contractual duty or obligation enforceable
against such person which would involve the expenditure of money by
such Person if complied with or enforced, including but not limited to
any Indirect Obligation of such Person.
(58) Original Loan Agreement. Shall have the meaning
specified in the first introductory paragraph of this Agreement.
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(59) Permitted Encumbrances. Those Encumbrances referred
to in the Indenture as being not forbidden or prohibited thereby.
(60) Person. Any individual, partnership, corporation,
trust, unincorporated association, joint venture, limited liability
company, Governmental Authority, estate or other organization in any
form that has the legal capacity to ▇▇▇ or be sued. If the context
does not indicate otherwise or so implies, the term includes a
Borrower.
(61) Prior Note. Shall have the meaning specified in the
first introductory paragraph of this Agreement.
(62) Real Estate Investment Trust. Shall have the meaning
specified in the Code. Real Estate Investment Trust also may be
referred herein as "REIT."
(63) Rent Assignment. Shall have the meaning specified in
the third introductory paragraph of this Agreement.
(64) Replacement Notes. Shall have the meaning specified
in the Second Amendment and the Third Amendment. The Replacement
Notes represent an amendment and modification of the Prior Note,
wherein each individual Bank received its own Note representing its
proportionate share in the Maximum Bank Commitment.
(65) Restated Notes. Shall have the meaning specified in
paragraph (c) of Article III of this Agreement.
(66) Responsible Officer. As to any Person that is not an
individual, partnership or trust, the chairman of the board of
directors, the president, the chief executive officer, the chief
operating officer, the chief financial officer, the treasurer, any
assistant treasurer, any senior vice president or any vice president
in charge of a principal business unit; as to any partnership or
limited liability company, any individual who is a general partner
thereof or any individual who has general management or administrative
authority over all or any principal unit of the business of the
partnership or limited liability company; and as to any trust, any
individual who is a trustee.
(67) Second Amendment. Shall have the meaning specified
in the fifth introductory paragraph of this Agreement.
(68) Secured Indebtedness. Shall mean any and all of the
Obligations and Indirect Obligations of the Borrowers (or either or
them) to the Agent and the Banks arising and which may arise under or
pursuant to any of the Loan Documents or any extension, renewal,
modification, rearrangement, restatement or supplement to any thereof
and, without limitation, shall include the following:
(a) All Indebtedness from time to time evidenced
by the Restated Notes;
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(b) All Indebtedness and Obligations of the
Borrowers, or either of them, which may arise or be incurred
under, pursuant to or by virtue of any of the Loan Documents
including the Amendment Fee and Loan Facility Fee;
(c) The amount of all Obligations incurred and
amounts reasonably expended by the Agent or the Banks for the
purpose of remedying or attempting to remedy any default(s) on
the part of the Borrowers, or either of them, in the due and
timely payment, observance, compliance with or performance of
any Indebtedness, undertaking or Obligation of the Borrowers,
or either of them, under or pursuant to or by virtue of any of
the Loan Documents;
(d) The amount of all Obligations incurred and
amounts reasonably expended by the Agent or the Banks for the
purpose of exercising or attempting to exercise any right(s)
or remedy(ies) consequent upon any default(s) on the part of
the Borrowers, or either of them in the due and timely
payment, observance, compliance with and performance of any
indebtedness, undertaking or obligation of the Borrowers, or
either of them, under or pursuant to or by virtue of any of
the Loan Documents, including but not limited to reasonable
attorneys' fees and attorneys' expenses (whether or not there
is litigation), court costs and all costs in connection with
any proceedings under the Bankruptcy Code pertaining thereto;
and
(e) Interest upon all amounts expended by the
Agent or any of the Banks for any of the purposes specified in
(iii) or (iv) immediately hereinabove computed at the Default
Rate specified in the Restated Notes upon the amount of each
such expenditure from the date thereof and all such amounts
shall be payable upon demand.
(69) Solvent. As to any Person, when (a) the fair value
of such Person's assets is in excess of the total amount of its debts
(including Indirect Obligations); (b) such Person is able to pay its
debts as they mature; and (c) such Person does not have unreasonably
small capital for the business in which it is engaged or for any
business or transaction in which it is about to engage; or (d) such
Person is not "insolvent" as such term is defined in Section 101(32)
of the Bankruptcy Code.
(70) Subsidiary. Any Person of which at least 50% of the
capital stock or equity interests having ordinary voting power for the
election of directors or other governing body of, or at least 50% of
the general partner interest in, such Person is owned by FLCO or the
Partnership, either directly or through one or more Subsidiaries.
(71) Supplemental Security Documents. Shall have the
meaning specified in paragraph (d) of Article III of this Agreement.
(72) Third Amendment. Shall have the meaning specified in
the sixth introductory paragraph of this Agreement.
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(73) UCC. The Uniform Commercial Code as in effect from
time to time in the State of Oklahoma or as to matters governed by the
laws of another jurisdiction, as in effect in such jurisdiction.
(74) Wall Street Journal Rate. Shall mean that annual
rate of interest published in each issue of Journal as the "Prime
Rate" under the column "Money Rates" and referred to as the base rate
for corporate loans posted by at least 75% of the nation's 30 largest
commercial banks. If the Journal should cease to publish a Prime Rate
of interest (or during any period when publication of the Journal
should be suspended for any indefinite period or a period in excess of
10 days) the Wall Street Journal Rate shall mean that variable annual
rate of interest which, in the good faith opinion of Agent, represents
the nearest and most practical equivalent of the Wall Street Journal
Rate.
Other terms are defined in this Agreement (i.e., "Event of Default")
and the other Loan Documents. Any term in this Agreement expressed with
initial capital letters and not specifically defined herein but which is
specifically defined in such other Loan Document shall have the meaning
ascribed to such term by such other Loan Document. Each reference to this
Agreement or any other Loan Document shall include a reference to each
appendix, exhibit, schedule, plat or other writing thereto (whether or not
attached thereto), as amended, modified, restated or replaced from time to
time.
I. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
To induce the Banks to enter into this Agreement, the Borrowers
severally represent and warrant to each of the Banks as follows:
1.1 Organization and Existence. FLCO is duly organized and
existing under and by virtue of the laws of and is in good standing in the
state of Maryland; Partnership is duly formed and existing under and by virtue
of the laws of the state of Delaware, and each Borrower is duly qualified to do
business and is in good standing in every state where the nature or extent of
its business or properties require it to be qualified to do business, except
where the failure to so qualify will not have a Material Adverse Effect. Each
Borrower has the power and authority to own its properties and carry on its
business as now being conducted.
1.2 Authorization. Each Borrower is duly authorized to execute
and perform every Loan Document to which such Borrower is a party, and each
Borrower is duly authorized to borrow hereunder, and this Agreement and the
other Loan Documents have been duly authorized by all requisite corporate and
partnership action of each Borrower. No consent, approval or authorization of,
or declaration or prior filing with, any Governmental Authority, and no consent
of any other Person, is required in connection with each Borrower's execution,
delivery or performance of the Loan Documents to which such Borrower is a
party, except for those already duly obtained.
1.3 Due Execution. Every Loan Document to which a Borrower is a
party has been executed on behalf of such Borrower by a duly authorized
Responsible Officer.
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1.4 Enforceability of Obligations. Each of the Loan Documents to
which a Borrower is a party constitutes a legal, valid and binding obligation
of such Borrower enforceable against such Borrower in accordance with its
terms, except to the extent that the enforceability thereof against such
Borrower may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally or by equitable
principles of general application.
1.5 Burdensome Obligations. No Borrower is a party to or bound by
any Contract or is subject to any provision in the Charter Documents of such
Borrower which would, if performed by such Borrower, result in an Event of
Default either immediately or upon the elapsing of time.
1.6 Legal Restraints. The execution of any Loan Document by a
Borrower will not violate or constitute a default under the Charter Documents
of such Borrower, any Material Agreement of such Borrower, or any Material Law,
and will not, except as expressly contemplated or permitted in this Agreement,
result in any Lien being imposed on any of such Borrower's property. The
performance by any Borrower of its obligations under any Loan Document to which
it is a party will not violate or constitute a default under the Charter
Documents of such Borrower, any Material Agreement of such Borrower, or any
Material Law, and will not, except as expressly contemplated or permitted in
this Agreement, result in any Lien being imposed on any of such Borrower's
property.
1.7 No Material Proceedings. There are no Material Proceedings
pending or, to the best knowledge of either Borrower, threatened.
1.8 Material Licenses. All Material Licenses have been obtained
or exist for each Borrower.
1.9 Compliance with Laws. Each Borrower is in compliance in all
material respects with all Material Laws. Without limiting the generality of
the foregoing:
(a) Compliance. The operations of every Borrower comply
in all material respects with all applicable Environmental Laws and
Employment Laws.
(b) Proceedings. None of the operations of any Borrower
are the subject of any judicial or administrative complaint, order or
proceeding alleging the violation of any applicable Environmental Laws
or Employment Laws which reasonably could be expected to have a
Material Adverse Effect.
(c) Investigations. None of the operations of any
Borrower are the subject of investigation known to the Borrowers by
any Governmental Authority regarding the improper transportation,
storage, disposal, generation or release into the environment of any
Hazardous Waste, the results of which may have a Material Adverse
Effect on such Borrower, on the value of the Collateral, or on the
overall assets of such Borrower.
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(d) Notices; Reports. No notice or report under any
Environmental Law indicating a past or present spill or release into
the environment of any Hazardous Waste has been filed, or is required
to be filed, by any Borrower.
(e) Real Property. No Borrower, nor to the best of each
Borrower's knowledge, any other Person, has, in violation of
Environmental Laws, at any time transported, stored, disposed of,
generated or released any Hazardous Waste on the surface, below the
surface, or within the boundaries of any Lands or any improvements
thereon. Except as set forth in environmental audits delivered to
Banks, the Borrowers have no knowledge of any Hazardous Waste on the
surface, below the surface, or within the boundaries of the Lands and
Hotels comprising part of the Collateral. The Lands and Hotels which
comprise part of the Collateral and all other real property and
improvements located thereon owned by a Borrower are not subject to a
Lien in favor of any Governmental Authority for any liability under
any Environmental Law or damages arising from or costs incurred by
such Governmental Authority in response to a spill or release of
Hazardous Waste into the environment.
(f) Environmental Property Transfer Acts. No
Environmental Property Transfer Acts are applicable to the
transactions contemplated by this Agreement or the other Loan
Documents and each Borrower has provided all notices and obtained all
necessary environmental permits, transfers and consents, if any,
required in order to consummate the transactions contemplated by this
Agreement or the other Loan Documents, to perfect the Banks' Liens on
the Collateral contemplated herein, and to operate each Borrower's
business as presently or proposed to be operated.
1.10 Other Names. No Borrower has used any name other than the
full name which identifies such Borrower in this Agreement. The only trade
name or style under which a Borrower transacts business is the name which
identifies such Borrower in this Agreement.
1.11 REIT Documents. FLCO has delivered to each of the Banks
executed documents (or, if not executed, certified by a Government Authority)
evidencing its qualification to become a Real Estate Investment Trust under the
Code. Such documentation has been duly authorized and executed and constitutes
the valid and binding obligation of FLCO and the other parties (if any) thereto
and the terms, provisions, covenants and undertakings of FLCO therein all of
which are enforceable in accordance with such terms and provisions. FLCO has
performed all obligations, duties, covenants and conditions required as
conditions to the consummation of the transactions contemplated by such
documentation.
1.12 Solvency. Each Borrower is Solvent prior to and after giving
effect to the transactions contemplated by this Agreement and the other Loan
Documents.
1.13 Financial Statements. The consolidated financial statements
of the Borrowers previously delivered to the Banks by the Borrowers pursuant to
the Original Loan Agreement, as amended, are complete and correct, have been
prepared in accordance with GAAP, and fairly reflect
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the financial condition, results of operations and cash flows of the Borrowers
covered thereby as of the dates and for the periods stated therein.
1.14 No Change in Condition. Since the date of the last financial
statements delivered to the Banks there has been no change which would have a
Material Adverse Effect on any Borrower.
1.15 No Defaults. No Borrower has breached or violated or is in
default under any Material Agreement, or is in default with respect to any
Material Obligation of such Borrower. No default has occurred under the
Original Loan Agreement, as amended, which is continuing and no Event of
Default has occurred under this Agreement.
1.16 Encumbrances. None of the Lands comprising the Collateral
purported to be owned by a Borrower including, without limitation, any of the
Hotels, is subject to any material Encumbrances except Permitted Encumbrances.
1.17 Condominium. None of the Hotels is part of a condominium,
except as previously disclosed in writing to the Banks.
1.18 Planned Unit Development. None of the Lands or Hotels are
part of a planned unit development, except as previously disclosed in writing
to the Banks.
1.19 Capital Leases. No Borrower has an interest as a lessee under
any Capital Lease exceeding $150,000 with respect to any Hotel.
1.20 Tax Liabilities; Governmental Charges. Each Borrower has
filed or caused to be filed all tax reports and returns required to be filed by
it with any Governmental Authority, except where extensions have been properly
obtained, and has paid or made adequate provision for payment of all taxes,
assessments, fees and other charges levied upon it or upon its income or
properties by any Governmental Authority which are due and payable, including
interest and penalties, except such taxes, assessments, fees and other charges,
if any, as are being diligently contested in good faith by appropriate
proceedings and as to which such Borrower has established adequate reserves in
conformity with GAAP on the books of such Borrower. No Liens for any such
taxes, assessments, fees or other charges have been filed and no claims are
being asserted with respect to any such taxes, assessments, fees or other
charges which, if adversely determined, would have a Material Adverse Effect on
such Borrower. There are no material unresolved issues concerning any tax
liability of a Borrower which, if adversely determined, would have a Material
Adverse Effect on such Borrower.
1.21 Management Agreements and Licenses. The Management Agreements
and Licenses are in full force and effect, are fully enforceable by and against
the Lessee and Promus Hotels, Inc. or any Affiliate thereof ("Manager"), and
have not been modified, amended or supplemented in any way. There are no other
agreements (oral or written) or understandings between the Borrowers and/or the
Lessee and Manager with respect to the operation and management of the Hotels
other than the Management Agreements and Licenses with Manager, copies of
which have been furnished to the Banks, provided, however, Manager has
delivered certain comfort letters to Agent and
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Partnership, evidencing its willingness to continue management of the Hotels in
the Event of a Default by the Borrowers or Lessee under any License or
Management Agreement.
1.22 Real Estate; Leases. Exhibits A and D set forth a correct and
complete list of (i) the Lands; and (ii) the Leases. Each of such Leases
itemized in Exhibit D is valid and enforceable in accordance with its terms and
is in full force and effect. No default by any party to any of the Leases
described in Exhibit D exists.
1.23 State of Collateral. The Partnership has good and marketable
title to the Lands and the Hotels presently located upon the Lands, and each
Borrower has good and marketable or merchantable title to the Collateral.
There are no Liens on the Collateral except as expressly permitted by this
Agreement and the other Loan Documents. Each item of tangible personal
property comprising part of the Collateral purported to be owned by a Borrower
is in good operating condition and repair, ordinary wear and tear alone
excepted and is suitable for the use to which it is customarily put by its
owner.
1.24 Chief Place of Business, Location of Collateral. As of the
date of this Agreement the chief executive office of each Borrower is located
at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and such
address is the address of the principal place of business of each Borrower.
Such address is the place where the principal books and records of each
Borrower concerning its Accounts are located and neither Borrower has any other
regular place of business except to the extent that the Partnership owns the
Lands and the Hotels covered by the Indenture, each of which is leased to the
Lessee and managed by Manager with no officers or employees of either Borrower
regularly stationed to work in any of the Hotels.
1.25 Negative Pledges. Neither Borrower is a party to or is bound
by any Contract which prohibits the existence of any Lien upon or assignment or
conveyance of any of the Lands or the Hotels covered by the Indenture or any
other Collateral except for restrictions on assignment set forth in the
Management Agreements and Licenses.
1.26 Security Documents.
(a) The Indenture. The Indenture is effective to grant
to the "Mortgagee" named therein legal, valid and enforceable first
mortgage or deed of trust liens upon the Collateral described therein,
including, without limitation, the Hotels located upon the Lands
described therein. The Mortgagee thereunder has a fully perfected
first priority lien upon the Hotels and Lands subject only to
Permitted Encumbrances. The security agreement language in the
Indenture is effective to grant the Mortgagee thereunder an
enforceable security interest in all rights, titles and interests of
the Borrowers in the personal property described therein. As to all
personal property in which a security interest may be perfected under
a state's UCC by the filing of a financing statement, the Mortgagee
named in the Indenture has a fully perfected first priority security
interest in the personal property described as Collateral in the
Indenture, subject only to Permitted Encumbrances and security
interests covering after acquired collateral or securing future
advances in which priority may be obtained by other
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Persons under the UCC, the tax lien provisions of the Code and certain
provisions of the Bankruptcy Code.
(b) The Rent Assignment. The Rent Assignment is
effective to grant to the Agent thereunder an enforceable Lien on the
assigned rents described therein. The Agent has a fully perfected
first priority lien on the assigned rents referred to in the Rent
Assignment.
1.27 True and Complete Disclosure. All factual information (taken
as a whole) heretofore or concurrently herewith furnished by the Borrowers, or
either of them, to any Bank (including, without limitation, information
contained in any of the Loan Documents) for purposes of or in connection with
this Agreement or any transaction contemplated hereby is true and accurate in
all material respects as of the date of which such information is dated or
certified and not incomplete by any omission to state any material fact
necessary to make such information (taken as a whole) not misleading at such
time in the light of the circumstances under which such information was
provided.
1.28 Margin Stock Securities Matters. Neither Borrower is engaged
or will engage, principally or as one of its important activities in the
business of extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) and no proceeds of any Loan Advance obtained by
either of the Borrowers will be used to purchase or carry any such margin stock
or for any purpose which violates, or would be inconsistent with, the
provisions of Regulation U or Regulation G and no proceeds of any Loan Advance
will be used by either Borrower to acquire any security in any transaction
which is the subject of Sections 13 and 14 of the Securities Exchange Act of
1934, as amended. Neither Borrower is an "Investment Company" registered or
required to be registered under the Investment Company Act of 1940, as amended,
or a company "controlled" (within the meaning of such Investment Company Act)
by such an "investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended. No Borrower is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or any other Law (other than the Code)
limiting or regulating its ability to incur Indebtedness for money borrowed.
1.29 Pension Benefit Plans, etc. Neither Borrower is a party to or
is covered as an "employer" by or under any pension benefit plan which is a
multi-employer plan as defined in Section 3(2) of Title I of ERISA which is
subject to Title IV of ERISA and in respect of which a Covered Period or a
Commonly Controlled Entity of such Covered Period of an "employer" as defined
in Section 3(5) of ERISA, except as disclosed in writing to the Banks.
1.30 Retiree Benefits. Neither Borrower has any obligation to
provide any Person with any medical, life insurance, or similar benefit
following such Person's retirement or termination of employment (or to such
Person's beneficiary subsequent to such Person's death) other than as required
by law or by employment agreements previously disclosed in writing to the
Banks.
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1.31 Subsidiaries. Attached hereto as Exhibit E is a true and
complete list of the Borrowers' Subsidiaries as of the date hereof.
1.32 Survival of Representations and Warranties. All of the
representations and warranties in this Agreement and all representations and
warranties in any certificate or other writing delivered by either of the
Borrowers to the Agent or any of the Banks pursuant hereto or in connection
with the application of the Borrowers for the Credit established by this
Agreement shall survive the execution and delivery of each of the Loan
Documents and the making of Loan Advances hereunder. Each representation and
warranty may be relied upon by each of the Banks as being true and correct as
of the date hereof until all of the Secured Indebtedness shall be paid in full.
II. THE TERM LOAN
2.1 Credit Available. For the purposes of this Agreement, the
Maximum Bank Commitment shall be the lesser of: (i) $85,000,000.00; or (ii) an
amount equal to 50% of the Accepted Appraised Value of all of the Hotels and
the related Collateral covered by the Indenture as of the time the Maximum Bank
Commitment is to be determined. Bank of Commerce agrees to purchase, and the
other Banks and AmSouth hereby agree to so assign an interest in the Credit
owed to the other Banks in such amount as is necessary to cause each Bank's
proportionate share of the Maximum Bank Commitment to be as follows (AmSouth
shall have no interest in the Credit from and after the date of this Agreement,
provided, however, AmSouth shall have the right to receive payment pursuant to
Section 4.17 of this Agreement):
Proportionate Share of
----------------------
Bank Maximum Bank Commitment
---- -----------------------
First Tennessee 3/17
The Agent 6/17
Bank One 3/17
Liberty 2/17
Bank of Commerce 3/17
The Accepted Appraised Value assigned to the Hotels and related Collateral
covered by the Indenture shall be deemed to be the value of each Hotel and
related Collateral during the term hereof unless a Hotel be substantially
damaged and destroyed while not insured as required in accordance with this
Agreement and the Indenture, or a Hotel be sold or released from the Indenture,
as provided herein, or all of the Banks should approve a change in such value
based upon one or more FIRREA appraisals. Except as provided in Section 4.15
hereof, the Banks shall bear the costs of any appraisals obtained hereunder.
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2.2 Security. The Agent, acting for itself and the other Banks,
shall be entitled to proceed against Collateral upon any Event of Default in
such order as the Banks shall deem suitable. All Collateral as to which the
liens and security interests in favor of the Banks shall have been perfected by
filing and recording shall secure the payment of all Secured Indebtedness
regardless of the Hotel to which the Collateral may be attributed for Maximum
Bank Commitment purposes. In the event of an insured loss or condemnation with
respect to any Hotel, all Insurance/Condemnation Proceeds relating thereto
shall be applied as provided in the Indenture.
2.3 Loan Advances. On the date of this Agreement, the Banks shall
make Loan Advances to the Borrowers in an amount up to the Maximum Bank
Commitment minus the then unpaid principal amount of all prior Loan Advances to
the Borrowers made under the Original Loan Agreement, as amended.
2.4 Partial Releases of Indenture and Rent Assignment. The Banks
do hereby consent to the Agent releasing, and Agent agrees to release, any
Hotel and related Collateral from the lien of the Indenture and from the Rent
Assignment upon receipt of a written request on behalf of the Borrowers if,
after giving effect thereto, the Accepted Appraised Values of the remaining
Hotels and related Collateral covered by the Indenture and Rent Assignment
equal at least $170,000,000.00.
2.5 Collateral To Continue Unimpaired. The Loan is a continuation
of the Loan represented by the Original Loan Agreement, as amended, and is not
a new loan. There shall not occur any interruption of priority in respect of
the Liens and security interests securing payment of the Secured Indebtedness.
2.6 Loan Advances To Be Made To Partnership Account. Each Loan
Advance to be made under this Agreement shall be made by deposit of the amount
thereof to the Loan Account in the name of the Partnership with the Agent who
shall receive from the other Banks their ratable share of each Loan Advance to
be made.
2.7 Each Bank Responsible For Its Proportionate Share of Maximum
Bank Commitment. Subject to the terms and conditions of this Agreement and the
other Loan Documents, each Bank shall be responsible for funding its ratable
portion of each Loan Advance which the Borrowers shall be entitled to receive
under this Agreement and no Bank shall in any manner be liable to the Borrowers
for or on account of the default of any other Bank in providing its
proportionate share of any Loan Advance.
2.8 Interest Rates and Prepayments. Subject to the provisions
hereof, the Secured Indebtedness shall bear interest at a rate per annum (based
on a year of 360 days and actual days elapsed) for each day of an Interest
Period equal to the Libor-Rate for such Interest Period plus 150 basis points.
Prepayments shall be allowed during any Interest Period provided that the
Borrowers indemnify the Agent and the Banks against any loss or expenses
(including loss of margin) which the Agent or the Banks sustain or incur as a
consequence thereof. If the outstanding Secured Indebtedness should exceed the
Maximum Bank Commitment at any time, then the Borrowers shall have 2 days after
notice thereof to pay the Banks, in care of the Agent, that amount by which the
Secured Indebtedness exceeds the Maximum Bank Commitment.
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2.9 Default Rate. Any installment or amounts due under the
Restated Notes, this Agreement or pursuant to any Loan Document which are not
paid when due shall bear interest at the Default Rate. "Default Rate" shall be
that annual rate of interest equal to four percentage points (4%) plus the Wall
Street Journal Rate in effect as of the date of said default.
2.10 Payments and Maturity. As provided in the Restated Notes, (i)
accrued interest only shall be payable monthly on the last Business Day of the
month (or on the last day of each Interest Period if other than the last
Business Day of such month), during the period from the date hereof through
September 30, 1997, commencing on October 31, 1996; (ii) payments of principal
and accrued interest shall be payable monthly during the period from October 1,
1997 through September 30, 2000, commencing on October 31, 1997; (iii) such
principal and interest payments shall be calculated on a 15 year (constant
payment) amortization schedule and adjusted annually (as of September 30th) to
reflect the then current Libor-Rate, and (iv) all principal and accrued
interest shall be due and payable in full on September 30, 2000. Payment of
the Secured Indebtedness is subject to the terms and conditions of the Restated
Notes executed and delivered in connection herewith.
III. CONDITIONS PRECEDENT
3. Effective Date. This Agreement shall be effective as of the
date first above written (the "Effective Date") when all of the following shall
have occurred:
(a) Amended and Restated Loan Agreement. This Agreement
shall have been executed and delivered by the Borrowers and the Banks.
(b) Assignment. The purchase by Bank of Commerce, and an
assignment by the other Banks and AmSouth, an interest in the Credit
owed to the other Banks in such amount as is necessary to cause each
Bank's proportionate share of Maximum Bank Commitment to be equal to
the percentages set forth opposite such Bank's name as set forth in
Section 2.1 of this Agreement.
(c) Restated Notes. The Borrowers shall have executed
and delivered to the order of the Banks, in care of the Agent, the
promissory notes in the form attached hereto as Exhibit F (the
"Restated Notes"). The Restated Notes shall represent a modification
of the Prior Note and Replacement Notes previously issued pursuant to
the Original Loan Agreement, as amended, and shall be issued to the
order of each Bank in a principal amount equal to the amount of its
proportionate share of the Maximum Bank Commitment. The Restated
Notes, as a whole, shall represent the Maximum Bank Commitment. The
Indebtedness outstanding under the Original Loan Agreement, as
amended, immediately before the issuance of the Restated Notes (the
"Existing Indebtedness") shall not be extinguished by the issuance of
the Restated Notes, rather it shall remain outstanding and be
evidenced by the Restated Notes. All payments hereafter made on the
Credit shall be applied first to indebtedness advanced after the
Effective Date then to the Existing Indebtedness.
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The Banks shall return to the Borrowers all Replacement Notes marked
"canceled by renewal" upon the Agent's receipt of the Restated Notes.
(d) Supplemental Security Documents. The Borrowers shall
have executed and delivered to the Agent, on behalf of the Banks,
amendments to the Indenture, Rent Assignment and Financing Statements,
in form satisfactory to the Agent, granting to the Agent, on behalf of
the Banks, first perfected Liens (subject to no other Liens other than
Permitted Encumbrances), on and in all of the Hotels located on the
Lands and reflecting of record that the Restated Notes are part of
the Secured Indebtedness (said supplemental and amended Loan
Documents, being herein referred to as the "Supplemental Security
Documents").
(e) Opinion Letters and Title Insurance. The Banks shall
have received (i) an opinion letter of the Borrowers' counsel as to
due organization of the Borrowers and authorization of appropriate
officers to execute and deliver this Agreement and the Supplemental
Security Documents, (ii) good standing certificates for all states
where the Lands are located, and (iii) opinion letters from local
counsel and/or title insurance endorsements, at the option and
absolute discretion of the Agent, as to the validity, priority and
enforceability of the Indenture, Rent Assignment and Financing
Statements, as amended and supplemented by the Supplemental Security
Documents covering the Hotels and related Collateral, all in form and
content satisfactory to the Banks.
(f) Resolutions. The Banks shall have received a true
and correct copy of the resolutions adopted by the board of directors
of FLCO duly authorizing the execution, delivery and performance by
FLCO, individually and as general partner of the Partnership, of this
Agreement, the Restated Notes and the Supplemental Security Documents
and all transactions contemplated therein, to which FLCO is a party,
both individually and as general partner of the Partnership.
(g) Incumbency Certificate. The Banks shall have
received certificates executed by the duly elected and acting
corporate secretary or assistant secretary of FLCO as to the officers
of FLCO authorized to execute and deliver this Agreement.
(h) Amendment Fee Payment. The Borrowers shall pay to
the Agent $200,000.00 of the Amendment Fee as provided for in Section
4.18 of this Agreement. The Agent shall be authorized to release and
distribute the $200,000.00 to the Banks in accordance with each
Bank's proportionate share in the Maximum Bank Commitment.
IV. AFFIRMATIVE COVENANTS AND AGREEMENTS
Each Borrower covenants and agrees that for so long as any Secured
Indebtedness shall remain outstanding and unpaid it will do and cause the other
Borrower (where appropriate) to do, or to be done the following:
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4.1 Corporate and Partnership Existence. Each Borrower shall
maintain its corporate or partnership existence, as the case may be, in good
standing and its right to transact business in those states in which it is now
or hereafter doing business. Each Borrower shall obtain and maintain all
Material Licenses for such Borrower. FLCO will diligently preserve its
qualification as a REIT.
4.2 Maintenance of Collateral. Each Borrower shall maintain in
good condition and working order, and repair and replace as required, the
Collateral.
4.3 Insurance. Each such Borrower shall at all times keep and
maintain or cause to be maintained in force policies of insurance covering the
Hotels issued by reputable insurers with minimum Best's ratings of A:1 and in
amounts customarily carried and maintained by reputable owners and operators of
major hotel properties in urban centers. Such policies shall be those required
by the Partnership to be maintained under each of the Management Agreements (as
presently in effect) or to be maintained by the Manager. All insurance
policies covering any Collateral shall comply in all respects with the
provisions of the Indenture and shall contain broad form mortgagee clauses
making losses payable to the Agent as Mortgagee. All general liability
policies covering the Hotels shall name the Agent for the ratable benefit of
the Banks as an additional insured. The Borrowers shall furnish copies of each
policy of insurance covering the Hotels carried or maintained by either of
them, or certificates in lieu thereof, to the Agent and if any policy(ies) of
insurance covering any Collateral shall be obtained, carried or maintained by
the Lessee, then said policies shall meet all of the requirements of the
Indenture and this Agreement and copies thereof shall be furnished to the
Agent.
4.4 Payment of Taxes and Other Obligations. Each Borrower shall
promptly pay and discharge or cause to be paid and discharged, prior to
delinquency, any and all income taxes, federal or otherwise, lawfully assessed
and imposed upon it, and any and all lawful taxes, rates, levies, and
assessments whatsoever upon any of the Collateral and every part thereof, or
upon the income or profits therefrom and all claims of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons for labor, materials,
supplies, storage or other items or services which if unpaid might be or become
a Lien or charge upon any of the Collateral; provided, however, that nothing
herein contained shall be construed as prohibiting a Borrower from diligently
contesting in good faith by appropriate proceedings the validity of any such
taxes, rates, levies, assessments or claims, provided such Borrower has
established adequate reserves therefor in conformity with GAAP on the books of
such Borrower, and no Lien, other than a Permitted Exception, results from such
non-payment.
4.5 Compliance With Laws. Each Borrower shall comply in all
material respects with all Material Laws. Without limiting the generality of
the foregoing:
(a) Environmental Laws. Each Borrower shall comply and shall
use commercially reasonable efforts to ensure compliance by all
tenants, subtenants and other occupants, if any, of the Lands and/or
the Hotels with all Environmental Laws.
(b) Employment Laws. Each Borrower shall comply with all
requirements of all Employment Laws applicable to such Borrower.
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4.6 Discovery and Clean-Up of Environmental Work.
(a) In General. Upon any Borrower's receiving notice or
otherwise acquiring knowledge of any violation of any Environmental
Law relating or pertaining to any Hotel or related facility(ies) at
any time, now or hereafter, constituting Collateral for the payment of
any Secured Indebtedness which would result in any material liability
under any Environmental Law, such Borrower shall (i) promptly take
such acts as may be required to prevent danger or harm to the property
or any person therein as a result of such Hazardous Waste; (ii) at the
request of the Banks, and at the Borrowers' sole cost and expense,
obtain and deliver to the Agent promptly, but in no event later than
90 days after such request, a then currently dated environmental
assessment of the property certified to the Banks and any future
holder of the Restated Notes or any Secured Indebtedness, a proposed
plan for responding to any environmental problems described in such
assessment, and an estimate of the costs thereof; and (iii) take all
necessary steps to initiate and expeditiously complete all removal,
remedial, responsive, corrective and other action to eliminate any
such environmental problems, and keep the Agent informed of such
actions and the results thereof.
(b) Asbestos Clean-Up. In the event that the Borrowers are
informed that any of the Hotels at any time covered by the Indenture
or any amendment or supplement thereto, contains asbestos or
asbestos-containing materials ("ACM"), the Borrowers shall develop and
implement or cause to be developed and implemented, as soon as
reasonably possible, an Operations and Maintenance Program (as
required by EPA guidance document entitled "Managing Asbestos in
Place; A Building Owner's Guide to Operations and Maintenance Programs
for Asbestos- Containing Materials") for managing in place the ACM,
and deliver a true, correct and complete copy of such Operations and
Maintenance Program to the Agent. In the event that the asbestos
survey done in connection with developing the Operations and
Maintenance Program reveals ACM which, due to its condition, location
or planned building renovation, is recommended to be encapsulated or
removed, the Borrowers shall promptly cause the same to be
encapsulated or removed and disposed of offsite, in either case by a
licensed and experienced asbestos contractor, all in accordance with
applicable state, federal and local Laws. Upon completion of any such
encapsulation or removal, the Borrowers shall deliver to the Agent a
certificate in such form as is then customarily available signed by
the consultant overseeing the activity certifying to the Banks that
the work has been completed in compliance with all applicable Laws
regarding notification, encapsulation, removal and disposal and that
no airborne fibers beyond permissible exposure limits remain on site.
All costs of such inspection, testing and remedial actions shall be
paid by the Borrowers.
4.7 Notice to Agent of Material Events. The Borrowers shall,
promptly upon any Responsible Officer of Borrower obtaining knowledge or notice
thereof, give notice to the Agent of any (i) breach of any of the covenants
herein; (ii) Event of Default; (iii) the commencement of any Material
Proceeding; (iv) any loss of or damage to any assets of a Borrower that is
likely to result in a Material Adverse Effect; and (v) any loss or damage to,
or institution of any proceeding for the condemnation or other taking of, any
of the Collateral, to the extent that such loss, damage or
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proceeding is likely to give rise to Insurance/Condemnation Proceeds in an
amount in excess of $100,000.00 or to result in a Material Adverse Effect. In
addition,
(a) The Borrowers shall furnish to the Agent from time to
time all information which the Agent reasonably requests with respect
to the status of any Material Proceeding.
(b) The Borrowers shall within 5 days inform the Agent of
its receipt of, and deliver to the Agent a copy of, any (i) notice
that any violation of any Environmental Law or Employment Law may have
been committed or is about to be committed by any Borrower with
respect to any of the Hotels, (ii) notice that any administrative or
judicial complaint or order has been filed or is about to be filed
against any Borrower alleging violations of any Environmental Law or
Employment Law or requiring such Borrower to take any action in
connection with the release of any Hazardous Waste into the
environment with respect to any of the Hotels, (iii) notice from a
federal, state, or local Governmental Authority or private party
alleging that a Borrower may be liable or responsible for costs
associated with a response to or cleanup of a release of Hazardous
Waste into the environment with respect to any of the Hotels or any
damages caused thereby, (iv) notice that a Borrower is subject to
federal, state or local investigation regarding the improper
transportation, storage, disposal, generation or release into the
environment of any Hazardous Waste with respect to any of the Hotels,
or (v) notice that any of the Hotels at any time covered by the
Indenture or any amendment or supplement thereto, are subject to a
Lien in favor of any Governmental Authority for any liability under
any Environmental Law or damages arising from or costs incurred by
such Governmental Authority in response to a release of Hazardous
Waste into the environment.
(c) The Borrowers shall, within 10 days after it occurs,
deliver to the Agent notice of any default or event of default, or the
occurrence of any event which would with the passage of time, giving
of notice or otherwise, constitute a default or event of default with
respect to any Material Obligation.
(d) The Borrowers shall deliver notice to the Agent of
any change in any Borrower's name, state of incorporation, form of
organization, trade names or styles under which such Borrower will
transact business, at least 30 days prior to such change.
(e) The Borrowers shall, immediately after becoming aware
thereof, deliver notice to the Agent of any Material Adverse Effect
upon any of Borrower's property, business, operations or condition
(financial or otherwise).
(f) The Borrowers shall, immediately after becoming aware
thereof, deliver notice to the Agent of any violation of any Law
applicable to any Borrower or its properties which may have a Material
Adverse Effect.
4.8 Maintenance of Liens of Security Documents.
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(a) Preservation and Perfection of Liens. The Borrowers
shall promptly, upon the reasonable request of the Agent and at the
Borrowers' expense, execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter file or
record in the appropriate governmental office, any document or
instrument supplementing or confirming the Indenture and each Loan
Document, or otherwise deemed necessary by the Agent to create,
preserve or perfect any Lien purported to be created by the Indenture
and each Loan Document or to fully consummate the transactions
contemplated by the Loan Documents.
(b) Compliance with Terms of Loan Documents. Comply and
cause every other Borrower to comply with all of the terms, conditions
and covenants in the Loan Documents to which such Borrower is a party.
4.9 Borrower Financial Statements and Compliance Certificates.
For so long as any Secured Indebtedness shall remain outstanding and unpaid the
Borrowers will furnish to the Agent, financial statements as follows:
(a) Whether or not FLCO is subject to the reporting
requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended ("Reporting Provisions"), Borrowers will furnish
to the Agent, within 5 days following the date upon which any annual,
quarterly or current report required by the Reporting Provisions is,
or would be (if FLCO was subject to the Reporting Provisions),
required to be filed with the Securities and Exchange Commission
("SEC"), 5 copies of each such report, without exhibits, or, if FLCO
is not then subject to the Reporting Provisions, copies of the
financial statements and any reports of independent public accountants
thereon that would be required to be included in such report if FLCO
was subject to the Reporting Provisions. All financial statements and
reports thereon required to be included (or which would be required to
be included if FLCO was subject to the Reporting Provisions) in any
such report shall be furnished to the Agent and shall be prepared in
compliance, in all material respects, with the rules and regulations
promulgated by the SEC applicable (or which would be applicable if
FLCO was subject to the Reporting Provisions) to such financial
statements. Each annual and quarterly report so furnished, or the
financial statements provided in lieu thereof (if FLCO is not subject
to the Reporting Provisions), shall include, without limitation,
financial statements of Lessee prepared in compliance, in all material
respects, with the rules and regulations promulgated by the SEC
applicable (or which would be applicable if FLCO was subject to the
Reporting Provisions) to such financial statements. The Reporting
Provisions shall include, at a minimum, delivery of a balance sheet,
income statement and cash flow statement.
(b) Upon receipt of any request from time to time by the
Agent, each Borrower will furnish in response to such request and
within a reasonable time following receipt thereof such other
un-audited financial information concerning such Borrower and its
operations or concerning the Collateral at any time covered by the
Indenture and such other matters pertaining to compliance with the
Loan Documents as reasonably may be requested;
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(c) To the extent quarterly financial statements
delivered by the Borrowers hereunder do not encompass operating
statements (including income statements) prepared in accordance with
GAAP for each of the Hotels, the Borrowers shall furnish to the Agent
5 copies of said statements within 45 days following the close of each
fiscal quarter of each Fiscal Year.
(d) In connection with the delivery of financial
statements as provided in this Section 4.9, the Borrowers also shall
deliver to the Agent a certificate, in form satisfactory to the Banks,
certifying that the Borrowers are in compliance with Sections 5.1,
5.12 and 5.13 of this Agreement.
4.10 Recordkeeping; Rights of Inspection. Each Borrower will: (i)
keep and cause every other Borrower to keep proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to such Borrower's property, businesses and activities
and which shall be in conformity with GAAP, (ii) permit Persons authorized by
the Agent to visit and inspect its property or the property of any other
Borrower, and to inspect its books of record and account and the books of
record and account of any every other Borrower and to make photocopies and
abstracts thereof, to review the accounts of every Borrower and to discuss the
affairs, finances and accounts of every Borrower with such Borrower's partners,
officers and managers and independent public accountants, during normal
business hours and as often as the Agent may reasonably request, and (iii)
permit the Agent to perform audits, on a periodic basis as determined by the
Banks at any time that an Event of Default exists, of such books and records of
account, in each case, at the Borrowers' expense (including paying the
out-of-pocket expenses of the Banks).
4.11 Material Agreements. The Borrowers shall fully perform all of
their respective obligations under all of the Material Agreements, and shall
enforce all of their respective rights and remedies thereunder as they each
deem appropriate in their reasonable business judgment; provided, however, that
neither Borrower shall take any action or fail to take any action which would
result in a waiver or other loss of any material right or remedy of said
Borrower thereunder, except as otherwise approved by the board of directors of
FLCO.
4.12 Further Assurances. The Borrowers shall execute and deliver,
or cause to be executed and delivered, to the Agent such documents and
agreements, and shall take or cause to be taken such actions, as the Agent may
from time to time reasonably request to carry out the terms and conditions of
this Agreement and the other Loan Documents.
4.13 Separate Bank Account for Loan Advances, Payments. The
Borrowers will arrange for the Partnership to establish and maintain a separate
bank account (the "Loan Account") in the name of the Partnership with the Agent
into which all Loan Proceeds shall be from time to time deposited to be
withdrawn by specially designated representatives of the Partnership and all
payments of principal, interest, loan fees and reimbursements made on behalf of
the Borrowers to the Agent or the Banks for expenses incurred by them in
respect of which the Borrowers have agreed to reimburse the Agent or the Banks
shall be deposited by the Agent to the Loan Account.
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Notwithstanding any other terms or provisions herein to the contrary, all Loan
Advances which the Banks are required to make hereunder shall be funded into
the Loan Account and no other.
4.14 Banks May Fund. If the Borrowers, or either of them, should
fail to satisfy any condition precedent to the right of the Borrowers to
receive any requested Loan Advance, any Bank may (but shall in no event be
required to do so) make a requested Loan Advance and the amount thereof shall
be evidenced by the Restated Notes if funded.
4.15 Expenses of and Claims Against the Banks. Whether or not any
Loan Advance is made hereunder the Borrowers will pay upon demand all
reasonable expenses incurred in connection with the transactions contemplated
by the Loan Documents, including reasonable fees and expenses of legal counsel
for the Agent and/or any of the Banks in connection with the preparation,
filing and recording of any Loan Documents and the furnishing to the Agent of
any opinions reasonably requested by or for them concerning the Loan Documents;
provided, however, that the Borrowers shall not be responsible for the fees or
out-of-pocket expenses of officers or employees of any of the Banks. The
Borrowers shall pay all premiums which may be required for any title insurance
endorsements reasonably required by the Banks covering property constituting
Collateral. To the extent not prohibited by applicable law or the limitations
set forth in the immediately preceding sentence, the Borrowers will pay all
costs and expenses of every character heretofore incurred or expended and
heretofore incurred or expended from time to time by the Agent or any Bank to
or for third parties and not for general administrative overhead or in-house
consultants or employees of the Agent or any Bank (including expenses for
appraisals and environmental assessments if any Event of Default shall have
occurred or if the Agent believes that any Hotel has been materially damaged or
is the subject of a violation of an Environmental Law) in connection with the
making of the Loan to the Borrowers or any transaction contemplated by the Loan
Documents, the evaluation, monitoring and protection of the Collateral and the
operation, perfection and realization upon the Agent's security interests in
and liens on the Collateral. The Borrowers also will promptly reimburse the
Agent and the Banks for any reasonable expenses relating to the Agent or any
Bank exercising any of their respective rights or remedies under or, in aid of
enforcement of, any of the Loan Documents including all inspection and
appraisal fees in connection therewith, fees of receivers, title examination
and abstract fees, legal fees, recording and filing fees (other than the
Oklahoma Real Estate Mortgage Registration Tax paid in connection with the
recording of the Indenture in Oklahoma) Uniform Commercial Code and related
lien search fees, taxes (except for income taxes and franchise taxes), escrow
fees, court costs, auctioneer fees and all other professional fees and expenses
and travel expenses in connection with actions and proceedings consequent on
default, all in every case to the extent reasonable and not prohibited by law.
4.16 Legal Compliance, Indemnification. The Partnership shall
cause the Lessee to operate or to assure the operation by the Manager of the
Collateral (or such other property manager as may be approved in writing by the
Banks) in full compliance with all Laws, ordinances, regulations and
governmental requirements as may from time to time be applicable to the
particular Collateral and the Borrowers shall indemnify the Agent and each of
the Banks for and hold each of them harmless against any losses, costs or
expenses incurred by reason of, arising out of or related to any failure or
omission of either of the Borrowers or the Lessee, as applicable, to comply
with any provision of the Loan Documents, the Leases or any of the Management
Agreements and Licenses
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between the Lessee and Manager, including but not limited to attorneys' fees
and court and settlement costs.
4.17 Loan Facility Fee. The Borrowers shall pay to the Agent for
the benefit of the Banks a "Loan Facility Fee" in the sum of $500,000.00, due
and payable on October 6, 1996. Such fee shall be apportioned among the Banks
as follows: $125,000.00 to AmSouth, $125,000.00 to Bank One, $75,000 to First
Tennessee, $50,000.00 to Liberty and $125,000.00 to the Agent.
4.18 Amendment Fee. The Borrowers shall pay to the Agent for the
ratable benefit of the Banks an "Amendment Fee" in the sum of $425,000.00
payable as follows:
(a) $200,000.00 upon execution of this Agreement;
(b) three annual payments of $75,000.00 each commencing
on September 30, 1997, provided, however, in the event the Loan is
prepaid in whole or part, then any remaining portion of the Amendment
Fee is due and payable in full.
4.19 Enforcement of the Leases, Licenses and Management Agreements.
Each of the Hotels presently constructed upon the Lands described in the
Indenture as Collateral is leased to the Lessee under one of the Leases
described as an Exhibit to the Rent Assignment and is the subject of a License
with Manager and is managed and operated for the Lessee pursuant to a
Management Agreement between the Lessee and Manager. The Partnership will take
all actions and do all things necessary or required to cause the Lessee to
keep, observe, comply with and perform all of the terms, provisions, covenants
and undertakings on its part required by each License, each sublease and
Management Agreement relating to any Hotel comprising Collateral. The
Partnership also will do all things and take all actions necessary or required
to cause the Lessee to enforce the provisions of each License and each
Management Agreement. The Partnership will prohibit the Lessee from entering
into any material amendments of any Lease, License or Management Agreement
without the prior written consent of the Banks and will cause the Lessee to
execute and deliver a subordination agreement in form and substance
satisfactory to Banks wherein Lessee subordinates its interests in the Lease to
the Loan and the interests of the Banks in the Hotels. The Partnership may not
substitute any lessee under any Lease without the prior written approval of the
Banks, which approval will not be unreasonably withheld or delayed, provided,
however, any approved substitute lessee must execute a subordination agreement
in form and substance satisfactory to the Banks.
V. NEGATIVE COVENANTS AND AGREEMENTS
The Borrowers covenant and agree with the Agent and the Banks that for
so long as any Secured Indebtedness shall remain outstanding and unpaid, the
Borrowers shall not, directly or indirectly, do any of the following without
the prior written consent of the Banks:
5.1 Debt Service Coverage. Suffer or permit the Debt Service
Coverage to be less than 1.60. "Debt Service Coverage" shall be the ratio of
Net Income attributable to those Hotels and related Collateral during any 12
month period divided by the sum of interest expense attributable to
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said Hotels during such 12 month period plus Imputed Debt Maturities. As used
herein, "Net Income" shall be that amount which would be shown as net income of
the Hotels and related Collateral on profit and loss statements (calculated on
a trailing 12 month basis) of the Hotels and related Collateral prepared in
accordance with GAAP plus the amount of all interest expense, depreciation and
amortization expenses less and except any Furniture, Fixtures and Equipment
Allowance provided in Article XL of each of the Leases (calculated on the basis
of 4% of Suites Revenues, as defined in the Leases, whether or not actually
paid or reserved). As used herein, "Imputed Debt Maturities" shall be the
amount of principal which would be due over the next 12 months if the Secured
Indebtedness was amortized on a 15 year mortgage amortization basis at an
assumed annual rate of interest equal to the greater of the actual interest
rate or 8% per annum.
5.2 Mergers; Acquisitions. Merge or consolidate with any Person
except (i) as approved by the Banks or (ii) if a Borrower is the surviving
entity in such merger, no Event of Default hereunder shall occur as a result of
such merger, and Borrowers are in compliance with their obligations hereunder
following such merger.
5.3 Liens and Encumbrances. Create, incur, assume or allow to
exist any Lien or Encumbrance upon any of the Lands or Hotels at any time
covered by the Indenture or any of the other Collateral, except the following
(the "Permitted Exceptions"):
(a) Permitted Encumbrances.
(b) Encumbrances in existence on the date hereof that
were listed as exceptions to title on title insurance policies
previously obtained by Agent with respect to the Lands or otherwise
previously disclosed in writing to Agent.
(c) Leases and concession agreements covering portions of
the Hotels for the operation of restaurants, bars, telephone systems,
personal communications service system facilities, and other similar
uses, each of which lease or concession agreement is or shall be
subordinate to the Indenture.
(d) Easement grants which do not interfere with the
operations of the Hotels.
(e) Liens for taxes, assessments or governmental charges
not delinquent or being diligently contested in good faith and by
appropriate proceedings and for which adequate book reserves in
accordance with GAAP are maintained.
(f) Liens arising out of deposits in connection with
worker's compensation, unemployment insurance, old age pensions, or
other social security or retirement benefits legislation.
(g) Deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds, and other obligations
of like nature arising in the ordinary course of business.
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(h) Liens imposed by any Law, such as mechanics',
workmen's, materialmen's, landlords', carriers', or other like Liens
arising in the ordinary course of business which secure payment of
obligations which are not past due or which are being diligently
contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP are maintained on the
Borrowers' books.
5.4 Disposal of Property. Except as permitted herein, sell,
transfer, exchange, lease or otherwise dispose of the Collateral or
substantially all of its assets other than in the ordinary course of business.
5.5 Change of Control. The Banks have made their determination to
enter into this Agreement and the transactions reflected herein on the basis of
reliance upon the experience, expertise and reputations of Messrs. ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. as experts in the management of Embassy
Suites(R) Hotels and neither of the Borrowers will suffer or permit their
business to be without the full time management of at least one of such
gentlemen and will not suffer or permit any Person other than FLCO or such
gentlemen to become a general partner of the Partnership.
5.6 Change of Business or Entity Structure. Engage in any
business other than the business substantially conducted by them on the date of
this Agreement or permit FLCO to change the form of its corporate structure or
the Partnership to effect any substantial change in its partnership structure.
The Borrowers agree that (a) at least 80% of their hotel "keys" shall be in
"suite type" hotels, (b) at least 75% of their suites shall be run under or be
converted to the Embassy Suites(R) flag, and (c) at least 70% of their suites
will be managed by Manager.
5.7 Transactions with Affiliates. Except as permitted herein,
enter into or be a party to any transaction or arrangement, including without
limitation, the purchase, sale or exchange of property of any kind or the
rendering of any service, with any Affiliate (other than Lessee), or make any
loans or advances to any Affiliate (other than Lessee under the Leases);
provided, however, that if no Event of Default has occurred and is continuing,
any Borrower may engage in the foregoing transactions in the ordinary course of
business and pursuant to the reasonable requirements of its business and on
fair and reasonable terms substantially as favorable to it as those which it
could obtain in a comparable arm's-length transaction with a non-Affiliate.
5.8 Conflicting Agreements. Enter into any agreement, that would,
if fully complied with by it, result in an Event of Default either immediately
or upon the elapsing of time.
5.9 Breach of Terms or Leases. Breach any term or provision nor
permit Lessee to breach any term or provision of the Leases, Management
Agreements, Licenses or any amendment or supplement thereto, or any other
agreements for the lease or sublease of any interest in the Hotels at any time
covered by the Indenture.
5.10 Amendments to Documents. Enter into or otherwise consent to
any material amendment or modification of the Charter Documents of either
Borrower as presently in effect, or
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any material amendment or modification to any Material Agreement directly
affecting any of the Collateral.
5.11 Certain Material Agreements. Enter into or become obligated
to enter into any material lease, sublease, license or other agreement for the
use, management or operation of any Hotel at any time covered by the Indenture
other than such agreements presently in effect with respect to the Hotels
described in the Indenture
5.12 Debt to Worth. At no time shall the Partnership allow its
Debt to be greater than its Adjusted Net Worth. For purposes of this section,
"Adjusted Net Worth" shall be defined as the sum of (a) its total partners'
equity, plus (b) its accumulated depreciation each as reflected on the
Partnership's balance sheet and presented in accordance with GAAP; and "Debt"
shall be defined as the sum of (a) all liabilities of the Partnership which
would appear on the balance sheet of the Partnership, plus (b) all Indirect
Obligations of the Partnership.
5.13 Dividends. During any Fiscal Year, the Borrowers may declare
and pay dividends and similar distributions in an amount not to exceed 85% of
their consolidated funds from operations attributable to such Fiscal Year;
provided, however, said distributions may exceed said 85% maximum if said
distributions are required in order for FLCO to maintain its status as a REIT.
VI. EVENTS OF DEFAULT, REMEDIES
6.1 Events of Default. If any one or more of the following events
should occur or conditions exist (each an "Event of Default"):
(a) Any event should occur under the provisions of this
Agreement or any other Loan Document which would constitute an Event
of Default specified as such therein or would authorize the holder of
the Restated Notes to accelerate the maturity thereof or exercise any
right or remedy to collect any Secured Indebtedness;
(b) Any payment of principal or interest, or both, due
upon the Secured Indebtedness should not be paid as and when due and
payable, and said payment failure shall continue for more than 10 days
after Agent shall have sent notice of said payment failure to the
Borrowers;
(c) Borrowers fail to pay any of the Secured Indebtedness
(other than principal of the Loan or interest accrued thereon) when
due and said payment failure shall continue for more than 10 days
after Agent shall have sent notice of said payment failure to the
Borrowers;
(d) Any representation or warranty made or deemed to be
made by the Borrowers in this Agreement, or any statement or
representation made or deemed to be made in any of the other Loan
Documents or any certificate, report, opinion or other document
delivered pursuant to this Agreement, is discovered to have been false
in any material respect when made;
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(e) Any Borrower shall fail to pay any outstanding
recourse Indebtedness (other than the Secured Indebtedness or
Indebtedness between Borrowers) in the principal amount of at least
$10,000,000, individually or when aggregated with all such
Indebtedness of Borrower and its Subsidiaries so in default, when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness; or if any other
event shall occur or condition shall exist under any such agreement or
instrument relating to outstanding recourse Indebtedness of any
Borrower in the principal amount of at least $10,000,000, which event
or condition shall result in the acceleration of the maturity of such
Indebtedness;
(f) Any one or more judgments or orders is entered
against either Borrower or any attachment or other levy is made
against the property of either Borrower with respect to a claim or
claims involving in the aggregate liabilities (not paid or fully
covered by insurance, less the amount of reasonable deductibles in
effect on the date of this Agreement) in excess of $5,000,000.00,
becomes final and non-appealable or if timely appealed is not fully
bonded and collection thereof stayed pending the appeal;
(g) Either Borrower files a certificate of dissolution
under applicable state law or is liquidated or dissolved or suspends
or terminates the operation of its business, or has commenced against
it any action or proceeding for its liquidation or dissolution or the
winding up of its business, or takes any corporate action in
furtherance thereof, or FLCO fails to qualify or is deemed by the IRS
to not qualify as a Real Estate Investment Trust under Sections
856-860 of the Code, and all regulations thereunder of the IRS;
(h) All or any part of any Hotel is nationalized,
expropriated or condemned, seized or otherwise appropriated, or
custody or control of such property or of such Borrower shall be
assumed by any Governmental Authority or any court of competent
jurisdiction at the instance of any Governmental Authority and such
nationalization, expropriation, condemnation, seizure, appropriation,
or assumption has or will have a Material Adverse Effect on any
Borrower or on such Hotel, except where contested in good faith by
proper proceedings diligently pursued where a stay of enforcement is
in effect;
(i) There is filed against any Borrower by any
Governmental Authority any civil or criminal action, suit or
proceeding under any federal or state racketeering statute (including,
without limitation, the Racketeer Influenced and Corrupt Organization
Act of 1970), which action, suit or proceeding is not dismissed within
120 days and reasonably could be expected to result in the
confiscation or forfeiture of any material portion of the Collateral;
(j) Except as otherwise provided in the Indenture, any
loss, theft, damage or destruction of any item or items of Collateral
occurs which has a Material Adverse Effect on
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the operation of either Borrower's business or is material in amount
and is not adequately covered by insurance;
(k) The Borrowers should fail to keep, observe, comply
with or perform any term, provision, covenant or undertaking on the
part of the Borrowers, or either of them, required by this Agreement
to be kept, observed, complied with or performed unless such failure
would otherwise constitute an Event of Default under any of Sections
6.1(a)-(j) and except for Borrower's failure to comply with or observe
the terms of Sections 5.3, 5.5, 5.6 and 5.12; provided that the
failure to comply or observe the terms of such sections shall be an
automatic Event of Default hereunder if such default should not be
remedied within 30 days of the first to occur of the following:
(i) the date on which one or both of the
Borrowers first became aware of such default; or
(ii) the date on which the Agent or any of the
Banks shall notify the Borrowers of such default;
(l) A custodianship, trusteeship, receivership or
assignment for the benefit of creditors shall be imposed upon either
Borrower or any of the Collateral (or a substantial part thereof) and
not dismissed within 21 days or shall be sought by either Borrower or
by any other person at any time obligated upon any Secured
Indebtedness or a petition for relief under any state or federal
bankruptcy, reorganization or insolvency law, including the Bankruptcy
Code, shall be filed against or by either Borrower or by such other
Person and the same shall not have been dismissed or withdrawn within
60 days after said filing,
then, and in such event the Agent or the Banks shall be entitled to declare all
Secured Indebtedness to be immediately owing and to exercise any and all rights
and remedies to collect the Secured Indebtedness contained in this Agreement
and the Loan Documents, all without demand, presentment, notice of dishonor,
protest or other notice or demand of any kind, the same being hereby expressly
waived by the Borrowers. Any Event of Default under this Agreement will
constitute an event of default or default, as the case may be, under each of
the other Loan Documents, whether or not such is an event of default or default
specified therein.
6.2 Remedies Cumulative. All remedies for collection of Secured
Indebtedness shall be cumulative and no exercise or attempted exercise of any
right or remedy consequent upon any Event of Default shall preclude the
subsequent, concurrent or alternative exercise of any other right or remedy and
no delay or omission of the Agent in the giving of any notice of default or
exercising any remedy consequent upon any Event of Default shall be deemed to
constitute a waiver thereof. Upon the occurrence of any Event of Default and
at any time and from time to time thereafter, each of the Banks is hereby
irrevocably authorized, without notice to the Borrowers (any such notice being
expressly waived by each Borrower), to setoff and apply against any and all
Obligations of the Borrowers owed to the Banks under this Agreement, the
Restated Notes and the other Loan
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Documents, any and all deposits (general or special, time, demand, provisional
or final) at any time held, or any other Indebtedness at any time owed by any
of the Banks to or for the credit or the account of either or both of the
Borrowers, irrespective of whether or not any of the Banks shall have made any
demand under this Agreement, the Restated Notes or any other Loan Document and
although such Obligation of the Borrowers may be unmatured. The rights of the
Banks in respect of such setoff(s) shall be cumulative to any and all other
rights and remedies in favor of the Banks consequent upon an Event of Default.
VII. GENERAL
7.1 Governing Law. This Agreement is executed in the state of
Oklahoma, all Loan Proceeds are advanced to the Borrowers in the state of
Oklahoma and all of the Secured Indebtedness is payable in the state of
Oklahoma. The Borrowers agree to and with the Agent and the Banks that this
Agreement shall be governed by and interpreted in accordance with the laws of
the state of Oklahoma without regard to any conflict or choice of law
provisions of Oklahoma law except only to the extent that remedies for
enforcement may be limited by the laws of one or more other states where
Collateral may be located in respect of realizing upon Collateral in such state
or states.
7.2 Provisions Cumulative, Partial Invalidity. All provisions
pertaining to the Secured Indebtedness and the collection thereof which are
contained in this Agreement and any of the other Loan Documents are intended to
be cumulative. If any term or provision of this Agreement or any other Loan
Document should be determined to be in any respect invalid or unenforceable
under the laws or decisions of any State such provision shall be deemed to have
been deleted insofar as it may affect any Collateral or any remedy available in
such state and this Agreement shall be enforced and deemed valid as to all
other provisions.
7.3 No Usury. It is the intent of this Agreement and all of the
Loan Documents that the rate(s) of interest or loan finance charge to be
received by the Banks shall not violate any provision of any usury law
applicable to payment of the Secured Indebtedness with all payments received by
the Agent for the Banks or by the Banks and the Agent in respect of the Loan in
excess of the maximum amount which may be received by the Banks in payment upon
the Secured Indebtedness to be applied in reduction of the principal.
7.4 Notices. Any notice required or permitted by this Agreement
to be given to the Borrowers shall be given by written notice sent by
registered or certified mail by the United States Postal Service with all
postage prepaid and addressed as follows:
FelCor Suite Hotels, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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with copies to:
FelCor Suite Hotels, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
and
FelCor Suite Hotels, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
and
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and if to Agent, Bank of Commerce, AmSouth, First Tennessee, Liberty or Bank
One shall be given by written notice sent by registered or certified mail by
the United States Postal Service with all postage prepaid and addressed as
follows:
If to Agent:
Boatmen's National Bank of Oklahoma
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: R. ▇▇▇▇ ▇▇▇▇▇▇▇
If to Bank of Commerce:
First National Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. Vice President.
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If to AmSouth:
AmSouth Bank Of Alabama
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Department
If to First Tennessee:
First Tennessee Bank National Association
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to Bank One:
Bank One, Texas, N.A.
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
If to Liberty:
Liberty Bank and Trust Company of Tulsa,
National Association
▇.▇. ▇▇▇ ▇▇▇
▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Wm. ▇. ▇▇▇▇▇▇
Notice may be given to such Borrowers and Banks, addressed to
each to the attention of the Persons named above, by
facsimile transmission as follows:
FelCor Suite Hotels, Inc.
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
(▇▇▇) ▇▇▇-▇▇▇▇
Boatmen's National Bank of Oklahoma
(▇▇▇) ▇▇▇-▇▇▇▇
First National Bank of Commerce
(▇▇▇) ▇▇▇-▇▇▇▇
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AmSouth Bank of Alabama
(▇▇▇) ▇▇▇-▇▇▇▇
First Tennessee Bank National Association
(▇▇▇) ▇▇▇-▇▇▇▇
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Bank One, Texas, N.A.
(▇▇▇) ▇▇▇-▇▇▇▇
Liberty Bank and Trust Company of Tulsa,
National Association
(▇▇▇) ▇▇▇-▇▇▇▇.
7.5 Successor, Alternate Trustees. The Indenture has designated
individuals to act as deed of trust trustees in the states of Tennessee and
Texas. If for any reason any person designated in the Indenture to act as such
a trustee should die, resign or be otherwise unavailable to act in such
capacity the Agent is hereby irrevocably authorized by the Partnership to
appoint one or more alternate or successor trustees to act without notice.
7.6 Borrowers' Indemnity. The Borrowers shall pay, indemnify and
hold harmless each of the Banks and their respective directors, officers,
employees, agents, and representatives (the "Indemnified Parties") for, from
and against, and promptly to reimburse the Indemnified Parties for, any and all
claims, damages, liabilities, losses, costs and expenses (including, without
limitations, reasonable attorneys' fees and expenses and amounts paid in
settlement) (the "Indemnified Liabilities") incurred, paid or sustained by the
Indemnified Parties in connection with, arising out of, based upon or otherwise
involving or resulting from any threatened, pending or completed action, suit,
investigation or other proceeding by, against or otherwise involving the
Indemnified Parties and in any way dealing with, relating to or otherwise
involving this Agreement, any of the other Loan Documents, or any transaction
contemplated hereby or thereby (each a "Triggering Event"); provided, however,
that the Borrowers shall have no obligation to indemnify the Indemnified
Parties hereunder with respect to any Indemnified Liabilities arising from the
gross negligence, bad faith or willful misconduct of any of the Indemnified
Parties. The Borrowers shall pay, indemnify and hold harmless the Indemnified
Parties for, from and against, and promptly reimburse the Indemnified Parties
for, any and all claims, damages, liabilities, losses, costs and expenses
(including, without limitations, reasonable attorneys' and consultant fees and
expenses, investigation and laboratory fees, removal, remedial, response and
corrective action costs, and amounts paid in settlement) incurred, paid or
sustained by the Indemnified Parties as a result of the manufacture, storage,
transportation, release or disposal of any Hazardous Waste on, from, over or
affecting any of the Collateral or any of the assets, properties, or operations
of either or both of the Borrowers or any predecessor in interest, directly or
indirectly. The obligations of the Borrowers under this Section 7.6 shall
survive the termination of the Credit, the payment and satisfaction of all of
the Secured Indebtedness, and the release of the Collateral. To the extent
that any of the indemnities set forth in this Section 7.6 may be unenforceable
because it is violative of any Law or public policy, the Borrowers shall pay
the maximum portion which they are permitted to pay under applicable Law.
7.7 Joint and Several Obligations. Unless the context clearly
indicates otherwise, each covenant, agreement, undertaking, condition or other
matter stated herein as a covenant, agreement, undertaking or matter involving
the Borrowers shall be jointly and severally binding upon both of the
Borrowers. The breach or violation of any covenant, agreement, undertaking or
matter expressly stated in the singular as a Borrower covenant, agreement or
undertaking on the part of a Borrower
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(e.g., "each Borrower") the effect of which would (with lapse of any time or
giving of any notice or both) constitute an event of default in respect of any
Loan Document shall constitute such an event in respect of both the Borrowers.
7.8 Successors and Assigns, No Third Party Benefit. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, but this provision shall not
authorize either of the Borrowers to assign or transfer any right to receive
any advance of Loan Proceeds, or other benefit hereunder or confer any right or
action upon any persons not a party hereto.
7.9 Counterparts; Controlling Agreement. This Agreement is
executed in multiple counterparts. One or more of the parties hereto may
execute a counterpart not executed by the other parties. Each party executing
a counterpart shall execute at least 8 counterparts. At such time as the Agent
shall receive 8 counterparts signed, collectively, by all parties, it shall
promptly furnish a copy hereof together with execution pages signed (though
separately by all parties) to each Bank and each Borrower. All such copies
shall be deemed to constitute an original copy. In the event of actual
conflict between the terms and provisions of this Agreement and the terms and
provisions of the Indentures or any other Loan Documents, the terms and
provisions of this Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement in multiple copies, each of which shall constitute an original copy,
to be effective as of the Effective Date.
"Borrowers" "Banks"
FELCOR SUITE HOTELS, INC. BOATMEN'S NATIONAL BANK OF OKLAHOMA
By By
---------------------------------- ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., President R. ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. Vice President
FIRST TENNESSEE BANK,
FELCOR SUITES LIMITED NATIONAL ASSOCIATION
PARTNERSHIP, By its Sole General
Partner, FELCOR SUITE HOTELS, INC.
By
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
By
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., President
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BANK ONE, TEXAS, N.A.
By
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, Vice President
LIBERTY BANK AND TRUST COMPANY OF TULSA,
NATIONAL ASSOCIATION
By
------------------------------------
Wm. ▇. ▇▇▇▇▇▇, Vice President
AMSOUTH BANK OF ALABAMA
By
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Vice President
FIRST NATIONAL BANK OF COMMERCE
By
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. Vice President
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